Crippling Medicare buy-in

Senate Democrats are also in negotiations over who, exactly, should be allowed to qualify for the expanded Medicare program. At this juncture, it doesn't appear that everyone in the 55-64 age bracket would be granted access. Negotiators are considering limiting consumers to those who would qualify for high-risk insurance pools already set up under the Senate's health care legislation. This would mean primarily those who have been uninsured for a certain amount of time, have a history of poor health or are unable to get insurance because of a preexisting condition.

I'd been hearing that the buy-in program would be limited to the exchange, which is limit enough, particularly given that it's already confined to folks between age 55 and 64. Further isolating it to the high-risk pool would make it, well, a lot less attractive. My instinct is to end this post by asking how many concessions supporters of sensible policy can possibly be asked to make, but as Harry Reid said today, the answer is basically as many as Ben Nelson wants them to make.

Update: Senate sources say that the limitation to the high-risk pool would only be for a transitional Medicare buy-in starting in 2010, but that the program would move to the exchanges come 2014. So never mind!

Here's my question: With a 55-64 Medicare buy-in, these adults are forfeiting the generational subsidy from the 2:1 age rating, and instead are placed in a pool of people age 55-64 with Medicare's bargaining power.

So would adults ages 55-64 save more from basically an individual rating with Medicare's bargaining power than with the generational subsidy from a 2:1 age rating on the Exchange? I think the math is unclear about this.

I mean -- my uncle has a 55-year-old doctor friend who has a $40K policy. It's hard to believe that Medicare's bargaining power can lower premiums enough to compensate for the generational subsidy the 55-year-old would be giving up with the same rating rules as in the House bill (2:1 age rating, no smoker rating -- same as Massachusetts).

Also, as Kent Conrad points out, Medicare's minimum actuarial value will be higher than the minimum actuarial value of the bill signed by the President. Wouldn't healthier people just purchase the cheapest policy on the Exchange, pocket the savings, and leave a sicker population on Medicare? And how would that affect the prices of people in the Medicare buy-in if it were to be based on a balanced budget?

I just think there are all kinds of things people aren't thinking about here.

On the Connector (again, MA has the same rating rules as in the House bill -- 2:1 on age, no smoker rating), a policy having 93% actuarial value (Gold tier) for a 55-year-old family of four living in Boston costs $2,000-$2,700/mo. For the Silver High Tier (around 78%-81% actuarial value) $1,600-$2,150/mo. Medicare's actuarial value is 76%. But it's hard to believe that a $40,000/yr. individual insurance policy could be brought down to $24,000/yr. -- even with Medicare's bargaining power.

According to ehealthinsurance.com, for a family of four living in Beverly Hills (the Wild West of individual insurance) that age with absolutely nothing wrong with them, I have a little less coverage (no deductible, $25 co-pays, $6,000 out-of-pocket cap) for $1,152/mo. Now that's for someone who is perfectly healthy. Obviously, at this age, that's a near impossibility.

I just think Democrats really need to think seriously about the risk selection here. There could be some serious unintendent consequences.

I've really had it with these four. Such prima donnas. Such egomaniacs. Such over-inflated ideas of their importance and the wisdom of their ideas. Such selfish, pathetic people, really. The GOpers are really bad, but in some ways these people are worse because they would kill the whole thing over some pet whim of theirs.

To me, the best trade would be to get Conrad's co-ops for the House's rating rules (2:1 on age, no smoker rating), minimum actuarial value (70%), subsidy levels, individual mandate (no 8% income exemption and start the penalty when the community rating begins), employer mandate, and Exchange structure ("prudent purchaser," plans looking virtually identical on tiers, requirements that plans offer on all tiers). That, to me, would be a really attractive deal.

And just like the public option, this ok-with-liberals compromise is now going to be sliced down to the smallest possible part necessary to keep the name intact. So that at the end you can have a Nelson/Stupak amendment (virtually untouched of course) while the Dems say "what are the lefties talking about?! They have the public option AND Medicare buy in!"

""This brand new, never-before-discussed “plan” is a shameful example of how our legislative process is corrupted and absurdly weighted against citizen participation. Who heard anything about this lowering of Medicare eligibility, at least since it disappeared after Baucus’s White Paper last fall?

Was this part of any House committee discussions? Did either Senate committee consider it? Has there been any public airing of this idea at all, and has there been any independent analysis and discussion of how this huge new moving part fits into the rest of the “reform” proposed?

That something entirely new could be proposed seriously this late in the process is ridiculous. That we are expected to line up in favor of it without seeing — at the least — the vaunted CBO score, is just trash.

When elected officials wonder why people are tuned out of electoral politics, and why even the most committed activists are mystified by their “process” — this is why.""